SBA loan default rate: charge-offs by year, industry and state
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The SBA does not publish a default rate. It publishes each loan's status, and the status that marks a loss is charged off. This page shows charge-off rates for SBA 7(a) loans approved FY2018 to FY2021, in the public file as of September 30, 2026.
Charge-off versus default
- Default means the borrower stopped paying as agreed. Some defaults are cured, restructured, or paid off later.
- Charge-off is the SBA's final loss write-off on a defaulted loan after collection efforts. This is the measure the file records, and the one used here.
- A charge-off rate is therefore a floor for the share of loans that ever defaulted. It is also not a delinquency rate, and loans still outstanding can still fail.
Across all FY2018 to FY2021 approvals in the file, 3.5% of 20,546 acquisition loans were charged off, against 6.2% of 160,958 non-acquisition 7(a) loans (every other stated purpose). By dollars the acquisition rate is 1.7%.
Why only older loans are measured
Charge-offs trail default by a year or more, so a loan approved recently looks safer than it will end up. To avoid flattering recent years, this page uses loans approved FY2018 to FY2021, which have had the longest time to surface losses. Cancelled loans and loans committed but not yet disbursed are excluded. A cohort row with fewer loans, or a recent year, should be read as incomplete.
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Charge-off rate by approval year
Acquisition loans were charged off less often than non-acquisition loans in every cohort. The acquisition rate ranged from 2.1% (FY2021) to 5.4% (FY2018); the non-acquisition rate from 3.4% to 8.3%. Later cohorts show lower rates partly because they are younger.
| Approval year | Acquisition loans | Charged off | Rate | Dollar rate | Non-acq. loans | Charged off | Rate | Dollar rate |
|---|---|---|---|---|---|---|---|---|
| FY2018 | 3,938 | 211 | 5.4% | 2.7% | 50,257 | 4,192 | 8.3% | 2.8% |
| FY2019 | 5,634 | 252 | 4.5% | 2.2% | 40,037 | 2,955 | 7.4% | 2.4% |
| FY2020 | 4,944 | 131 | 2.6% | 1.2% | 31,520 | 1,459 | 4.6% | 1.2% |
| FY2021 | 6,030 | 129 | 2.1% | 1.2% | 39,144 | 1,318 | 3.4% | 0.7% |
Acquisition charge-off rate by industry
The 30 industries with the most seasoned acquisition loans (minimum 50). The national acquisition rate for comparison is 3.5%.
| Industry | Seasoned loans | Charged off | Rate | Against national |
|---|---|---|---|---|
| Full-Service Restaurants | 1,127 | 66 | 5.9% | 66% higher than the 3.5% rate |
| Hotels and Motels | 1,127 | 9 | 0.8% | 77% lower than the 3.5% rate |
| Limited-Service Restaurants | 1,057 | 56 | 5.3% | 51% higher than the 3.5% rate |
| Beer, Wine, and Liquor Retailers | 785 | 11 | 1.4% | 60% lower than the 3.5% rate |
| Gasoline Stations with Convenience Stores | 582 | 5 | 0.9% | 76% lower than the 3.5% rate |
| Insurance Agencies and Brokerages | 421 | 13 | 3.1% | 12% lower than the 3.5% rate |
| General Automotive Repair | 408 | 18 | 4.4% | 25% higher than the 3.5% rate |
| Child Care Services | 383 | 3 | 0.8% | 78% lower than the 3.5% rate |
| Plumbing, Heating, and Air-Conditioning Contractors | 327 | 8 | 2.5% | 30% lower than the 3.5% rate |
| Fitness and Recreational Sports Centers | 317 | 31 | 9.8% | 178% higher than the 3.5% rate |
| Landscaping Services | 292 | 16 | 5.5% | 56% higher than the 3.5% rate |
| Home Health Care Services | 277 | 5 | 1.8% | 49% lower than the 3.5% rate |
| Pharmacies and Drug Retailers | 270 | 9 | 3.3% | 5% lower than the 3.5% rate |
| Offices of Dentists | 262 | 1 | 0.4% | 89% lower than the 3.5% rate |
| All Other Specialty Trade Contractors | 261 | 11 | 4.2% | 20% higher than the 3.5% rate |
| Beauty Salons | 259 | 8 | 3.1% | 12% lower than the 3.5% rate |
| Offices of Chiropractors | 249 | 14 | 5.6% | 60% higher than the 3.5% rate |
| Convenience Retailers | 246 | 5 | 2.0% | 42% lower than the 3.5% rate |
| Offices of Certified Public Accountants | 241 | 7 | 2.9% | 18% lower than the 3.5% rate |
| Car Washes | 222 | 2 | 0.9% | 74% lower than the 3.5% rate |
| Assisted Living Facilities for the Elderly | 215 | 0 | 0.0% | 100% lower than the 3.5% rate |
| Snack and Nonalcoholic Beverage Bars | 204 | 12 | 5.9% | 67% higher than the 3.5% rate |
| Supermarkets and Other Grocery Retailers | 203 | 8 | 3.9% | 12% higher than the 3.5% rate |
| Drycleaning and Laundry Services | 181 | 15 | 8.3% | 136% higher than the 3.5% rate |
| Couriers and Express Delivery Services | 171 | 8 | 4.7% | 33% higher than the 3.5% rate |
| Funeral Homes and Funeral Services | 166 | 1 | 0.6% | 83% lower than the 3.5% rate |
| Janitorial Services | 154 | 4 | 2.6% | 26% lower than the 3.5% rate |
| Electrical Contractors and Other Wiring Installation Contractors | 148 | 6 | 4.0% | 15% higher than the 3.5% rate |
| Coin-Operated Laundries and Drycleaners | 141 | 6 | 4.3% | 21% higher than the 3.5% rate |
| Drinking Places (Alcoholic Beverages) | 140 | 3 | 2.1% | 39% lower than the 3.5% rate |
Acquisition charge-off rate by state
The 46 states and territories with at least 50 seasoned acquisition loans. A state's rate reflects the industries and lenders active there as well as local conditions.
| State | Seasoned loans | Charged off | Rate | Against national |
|---|---|---|---|---|
| California | 2,250 | 93 | 4.1% | 17% higher than the 3.5% rate |
| Texas | 1,733 | 83 | 4.8% | 36% higher than the 3.5% rate |
| Florida | 1,487 | 85 | 5.7% | 63% higher than the 3.5% rate |
| Washington | 861 | 29 | 3.4% | in line with the 3.5% rate |
| Georgia | 814 | 26 | 3.2% | 9% lower than the 3.5% rate |
| Minnesota | 803 | 26 | 3.2% | 8% lower than the 3.5% rate |
| Michigan | 736 | 13 | 1.8% | 50% lower than the 3.5% rate |
| Ohio | 734 | 14 | 1.9% | 46% lower than the 3.5% rate |
| Pennsylvania | 729 | 15 | 2.1% | 41% lower than the 3.5% rate |
| Illinois | 719 | 32 | 4.5% | 26% higher than the 3.5% rate |
| Colorado | 705 | 29 | 4.1% | 17% higher than the 3.5% rate |
| New York | 661 | 18 | 2.7% | 23% lower than the 3.5% rate |
| Wisconsin | 641 | 17 | 2.6% | 25% lower than the 3.5% rate |
| North Carolina | 632 | 13 | 2.1% | 41% lower than the 3.5% rate |
| Indiana | 513 | 16 | 3.1% | 11% lower than the 3.5% rate |
| Missouri | 477 | 14 | 2.9% | 16% lower than the 3.5% rate |
| New Jersey | 449 | 9 | 2.0% | 43% lower than the 3.5% rate |
| Arizona | 434 | 15 | 3.5% | in line with the 3.5% rate |
| Massachusetts | 409 | 13 | 3.2% | 10% lower than the 3.5% rate |
| Virginia | 363 | 13 | 3.6% | in line with the 3.5% rate |
| Oregon | 293 | 13 | 4.4% | 26% higher than the 3.5% rate |
| Utah | 269 | 13 | 4.8% | 37% higher than the 3.5% rate |
| South Carolina | 267 | 12 | 4.5% | 28% higher than the 3.5% rate |
| Maryland | 260 | 14 | 5.4% | 53% higher than the 3.5% rate |
| Tennessee | 250 | 7 | 2.8% | 20% lower than the 3.5% rate |
| Kansas | 247 | 12 | 4.9% | 38% higher than the 3.5% rate |
| Oklahoma | 244 | 9 | 3.7% | in line with the 3.5% rate |
| Iowa | 209 | 8 | 3.8% | 9% higher than the 3.5% rate |
| Connecticut | 176 | 3 | 1.7% | 52% lower than the 3.5% rate |
| Alabama | 173 | 6 | 3.5% | in line with the 3.5% rate |
| Louisiana | 171 | 11 | 6.4% | 83% higher than the 3.5% rate |
| Idaho | 159 | 2 | 1.3% | 64% lower than the 3.5% rate |
| Mississippi | 155 | 4 | 2.6% | 27% lower than the 3.5% rate |
| Nevada | 154 | 3 | 1.9% | 45% lower than the 3.5% rate |
| Kentucky | 153 | 3 | 2.0% | 44% lower than the 3.5% rate |
| Arkansas | 153 | 7 | 4.6% | 30% higher than the 3.5% rate |
| Nebraska | 142 | 5 | 3.5% | in line with the 3.5% rate |
| Montana | 134 | 2 | 1.5% | 58% lower than the 3.5% rate |
| New Hampshire | 129 | 1 | 0.8% | 78% lower than the 3.5% rate |
| New Mexico | 82 | 3 | 3.7% | in line with the 3.5% rate |
| Maine | 76 | 0 | 0.0% | 100% lower than the 3.5% rate |
| South Dakota | 76 | 2 | 2.6% | 25% lower than the 3.5% rate |
| Rhode Island | 65 | 2 | 3.1% | 13% lower than the 3.5% rate |
| West Virginia | 61 | 2 | 3.3% | 7% lower than the 3.5% rate |
| North Dakota | 56 | 0 | 0.0% | 100% lower than the 3.5% rate |
| Delaware | 51 | 2 | 3.9% | 11% higher than the 3.5% rate |
Acquisition charge-off rate by franchise brand
Franchise brands with at least 50 seasoned acquisition loans (approved FY2018 to FY2021), ranked by seasoned loan count. Brands under a fuel or supply agreement are excluded. Among the 12 franchise brands with at least 50 seasoned loans, Anytime Fitness had the highest charge-off rate (10.5%) and 8 had none charged off; 10 of the 12 were below the 3.5% national acquisition rate.
| Brand | Seasoned loans | Charged off | Rate | Against national |
|---|---|---|---|---|
| Subway | 144 | 8 | 5.6% | 58% higher than the 3.5% rate |
| The UPS Store | 125 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Quality Inn | 87 | 2 | 2.3% | 35% lower than the 3.5% rate |
| Anytime Fitness | 76 | 8 | 10.5% | 199% higher than the 3.5% rate |
| Motel 6 | 71 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Super 8 | 66 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Red Roof Inn | 64 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Best Western | 56 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Days Inn | 56 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Dairy Queen | 54 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Home Instead | 53 | 0 | 0.0% | none charged off, against the 3.5% rate |
| Ace Hardware | 51 | 1 | 2.0% | 44% lower than the 3.5% rate |
Acquisition charge-off rate by lender
The 20 lenders with the most seasoned acquisition loans (minimum 100). Among the 20 lenders with at least 100 seasoned loans, Midwest Regional Bank had the highest charge-off rate (8.9%) and PNC Bank, National Association the lowest (0.5%); 9 of the 20 were below the 3.5% national acquisition rate. A lender's rate reflects the borrowers and industries it serves as well as its underwriting, so it is not a quality score.
| Lender | Seasoned loans | Charged off | Rate | Against national |
|---|---|---|---|---|
| Live Oak Banking Company | 1,665 | 51 | 3.1% | 13% lower than the 3.5% rate |
| The Huntington National Bank | 862 | 34 | 3.9% | 12% higher than the 3.5% rate |
| Stearns Bank National Association | 434 | 32 | 7.4% | 109% higher than the 3.5% rate |
| Wells Fargo Bank National Association | 417 | 37 | 8.9% | 152% higher than the 3.5% rate |
| Celtic Bank Corporation | 409 | 15 | 3.7% | in line with the 3.5% rate |
| Hanmi Bank | 363 | 7 | 1.9% | 45% lower than the 3.5% rate |
| Columbia Bank | 328 | 16 | 4.9% | 39% higher than the 3.5% rate |
| Bank of Hope | 301 | 16 | 5.3% | 51% higher than the 3.5% rate |
| Byline Bank | 259 | 17 | 6.6% | 86% higher than the 3.5% rate |
| Manufacturers and Traders Trust Company | 256 | 20 | 7.8% | 122% higher than the 3.5% rate |
| United Midwest Savings Bank National Association | 237 | 2 | 0.8% | 76% lower than the 3.5% rate |
| Beacon Bank and Trust | 230 | 4 | 1.7% | 51% lower than the 3.5% rate |
| Metro City Bank | 226 | 3 | 1.3% | 62% lower than the 3.5% rate |
| Pinnacle Bank | 211 | 4 | 1.9% | 46% lower than the 3.5% rate |
| Midwest Regional Bank | 202 | 18 | 8.9% | 153% higher than the 3.5% rate |
| GBank | 199 | 3 | 1.5% | 57% lower than the 3.5% rate |
| PNC Bank, National Association | 196 | 1 | 0.5% | 86% lower than the 3.5% rate |
| U.S. Bank, National Association | 191 | 11 | 5.8% | 64% higher than the 3.5% rate |
| Old National Bank | 185 | 7 | 3.8% | 7% higher than the 3.5% rate |
| Open Bank | 183 | 3 | 1.6% | 53% lower than the 3.5% rate |
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Questions buyers ask
What is the SBA 7(a) loan default rate?
The SBA does not publish a single default rate in its public loan file. It records each loan's status, and the status CHGOFF means the SBA wrote the loan off as a loss after default and collection efforts. For 7(a) loans approved FY2018 to FY2021, 6.2% of non-acquisition loans and 3.5% of acquisition loans have been charged off.
Is a charge-off the same as a default?
No. A default is a missed obligation that may later be cured, restructured, or paid in full. A charge-off is the final loss recognition and comes after a default, usually a year or more later. Charge-off rates therefore understate how many loans ever defaulted.
Why does this page only show loans approved FY2018 to FY2021?
Charge-offs trail default, so recent loans have not had time to show their losses. Loans approved at least about five years ago have mostly worked through that lag. The acquisition tag in the SBA file also starts in FY2018, so FY2018 is the oldest acquisition cohort.
Do acquisition loans default less often than other 7(a) loans?
In this file they have been charged off less often so far: 3.5% for acquisition loans against 6.2% for non-acquisition loans (every other stated purpose) approved FY2018 to FY2021. The pattern holds in each cohort year shown above.
Which industries and states have the highest charge-off rates?
Among industries with at least 50 seasoned acquisition loans, Fitness and Recreational Sports Centers was highest at 9.8% and Assisted Living Facilities for the Elderly lowest at 0.0%. Among states with at least 50 seasoned loans, Louisiana was highest at 6.4% and Maine lowest at 0.0%. Small samples move these rates, so read them as direction.
Related
Cite this data
SBA Acquisition Data, "SBA loan default rate: charge-offs by year, industry and state", https://sbaacquisitiondata.com/sba-loan-default-rate (data as of September 30, 2026). Source: U.S. Small Business Administration 7(a) loan file, data.sba.gov. Aggregated by SBA Acquisition Data.
The figures on this page are also published as JSON at https://sbaacquisitiondata.com/data/sba-loan-default-rate.json.